Tennessee offers first-time buyers a forgivable down payment option through THDA, plus substantial city programs in Nashville and Memphis — though the state help is a forgivable loan rather than a pure grant.
This guide covers what actually counts as grant money for first-time buyers in Tennessee in 2026 — the help that does not have to be repaid, the truth about the federal grant everyone asks about, and how to find and qualify for it.
Are there really first-time home buyer grants in Tennessee?
Here is the honest answer most sites skip: a true grant is money you never repay, but the majority of what gets marketed as a “first-time home buyer grant” is actually a forgivable loan — a second mortgage that is written off over time as long as you stay in the home. The practical difference is small if you plan to stay put, but it matters if you might sell or refinance early. In Tennessee, THDA’s Great Choice Plus comes in a forgivable version and a repayable version, and city programs add more grant-like money.
For the full difference between grants, forgivable seconds, and deferred loans, our national guide to down payment assistance breaks it down.
Tennessee grant and forgivable-money programs
Here is Tennessee’s grant-like money, statewide and in its biggest cities:
- Great Choice Plus (Deferred Option) — $6,000 or $10,000 as a 0%-interest forgivable second with no monthly payment, forgiven over 10 years
- Great Choice Plus (Amortizing Option) — up to 5% of the sales price (max $15,000) — note this one is a repayable second, not forgivable
- City programs — Nashville’s The Housing Fund (up to $35,000) and Memphis’s Citywide DPA and HIP (up to $25,000, forgivable over 5 years) add substantial local help
This page focuses on the no-repay and forgivable money. For the full menu — including deferred loans, below-market mortgages, and the Mortgage Credit Certificate — see our complete guide to Tennessee first-time home buyer programs.
The $25,000 first-time buyer grant — is it real?
You have probably seen ads for a “$25,000 first-time home buyer grant” or a “$15,000 first-time buyer tax credit.” Here is the truth as of 2026: both come from proposed federal bills (the Downpayment Toward Equity Act and the First-Time Homebuyer Tax Credit Act) that have not become law. No one can give you that $25,000 federal grant today, in Tennessee or anywhere else, because it does not exist yet — so be cautious with any site or “lender” that promises it. We track the real status on our explainer of the $25,000 first-time home buyer grant. The good news: the Tennessee programs above are real, available now, and often just as valuable.
How to qualify for a grant in Tennessee
Grant and forgivable programs in Tennessee share a familiar set of rules:
- Income limits. THDA sets household income limits by county.
- First-time status. First-time status is required in non-targeted areas, and waived in targeted areas and for qualifying veterans.
- Homebuyer education. Nearly every grant program requires a short course, usually free and often online.
- A participating lender. Grants are delivered through approved lenders, not the agency directly, so ask which programs a lender offers — and check our guide to credit score requirements to be sure you qualify for the underlying loan.
- Primary residence. The home must be the one you live in, not an investment property.
How to find down payment grants in Tennessee
THDA’s deferred option is forgivable; for larger amounts, the city programs in Nashville and Memphis are worth a close look.
Several Tennessee cities also run their own grant and forgivable programs on top of the state help — see our city guides for Nashville and Memphis.
And before you count on any figure, remember that grant funding runs in cycles and can be exhausted, so always confirm current availability with the program. Our first-time home buyer checklist keeps the rest of your purchase on track.
Tennessee first-time buyer grants FAQ
Do first-time home buyer grants in Tennessee have to be repaid?
Tennessee’s Great Choice Plus deferred option is forgivable over 10 years, so you keep it if you stay. The amortizing option is a repayable second you pay back over 30 years. Memphis’s city help is forgivable over 5 years; Nashville’s Housing Fund loan is repayable. Confirm which you are using.
Is there a $25,000 grant for first-time buyers in Tennessee?
Not currently. The $25,000 figure comes from a proposed federal bill (the Downpayment Toward Equity Act) that has not become law, so it is not available in Tennessee or any state today. What is available are Tennessee’s real grant and forgivable programs described above, plus the statewide options in our Tennessee programs guide.
Who qualifies for down payment grants in Tennessee?
First-time status is required in non-targeted areas, and waived in targeted areas and for qualifying veterans. THDA sets household income limits by county. You will also complete a homebuyer education course and use a participating lender.
What is the difference between the two Great Choice Plus options in Tennessee?
The Deferred Option gives $6,000 or $10,000 as a zero-interest forgivable second with no monthly payment, forgiven over ten years — the more grant-like choice. The Amortizing Option gives more, up to 5% of the price (max $15,000), but you repay it over 30 years at your first-mortgage rate. If keeping ongoing costs low matters most, the deferred, forgivable option is usually the better pick. A THDA lender can compare them.